Sim Lian Ltd acquired a forklift machine for $125,000 on 1 July 2022. It depreciated the asset at 10% p.a. on a straight-line basis. On 30 June 2024, Sim Lian Ltd conducted an impairment test on the asset. It determined that the asset could be sold to other entities for $70,000 with costs of disposal of $5,000. Management expect to use the forklift machine for the next four years with expected cash flows from use of the forklift machine being: Cash Flows of Sim Lian Ltd. 2024 $40,000 2025 30,000 2026 25,000 2027 20,000 The rate of return expected by the market on this forklift machine is 8% p.a. Required:

a) Assess whether the forklift machine is impaired.

b) Provide the appropriate journal entry to recognise any impairment loss.